Skip to main content

Post-Apartheid Economic Policy in South Africa: Putting Mandela's Legacy in Perspective

The coverage on Mandela, no doubt one of the greatest leaders of the 20th century, and essential for the ending of Apartheid, was as it is often the case a bit simplistic, which actually reduces the struggles he had to fight to relatively simple and manicheistic choices between good and evil (e.g. like in Bush's famous "if you're not with us, you're against us," meaning with the terrorists). His actually legacy is considerably more complex, and a few publications had noted it (see here for three myths about his political legacy, including the racist notion that without him blacks would have murdered all whites; h/t Butch Montes).

His economic legacy is also considerably more complicated than what one might expect, and there was virtually no coverage in the press about it. John Pilger in Counterpunch relates how Mandela was in neogotiations with the Apartheid regime since the early 1980s, and that "the apartheid regime’s aim was to split the ANC [African National Congress] between the “moderates” they could “do business with” (Mandela, Thabo Mbeki and Oliver Tambo) and those in the frontline townships who led the United Democratic Front (UDF)." He further quotes an ANC Minister suggesting that their policies were Thatcherite and saying: “You can put any label on it if you like…but, for this country, privatisation is the fundamental policy.”

He suggests that by the time Mandela was freed in 1989, the Apartheid regime had already helped build up a tiny black elite, supported by crony relations with the regime, which led to increasing the inequality among blacks. He argues, further, that: "Mandela, too, fostered crony relationships with wealthy whites from the corporate world, including those who had profited from apartheid. He saw this as part of 'reconciliation'." His conclusion is that even though racial Apartheid is over, economic Apartheid is very much alive.

A more thorough analysis of the failure of the post-Apartheid economic was presented a while ago in Patrick Bond's book Elite Transition: Form Apartheid to Neoliberalism in South Africawere he argues that: "post-apartheid policy-makers drew all the wrong lessons from ‘international experience’ and hence prepared to amplify rather than correct apartheid-capitalism’s main economic distortions." These wrong lessons implied "very conservative economic policies--fiscal restraint, an independent Reserve Bank (hence inoculation from democratic inputs), trade liberalisation and co-optive labour policies." Mandela resisted fiscal policies that favored redistribution, and maintained fiscal conservatism in order to avoid inflation (a very conservative view of the causes of inflation).

Inequality remains incredibly high (a Gini of 63.1 according to the World Bank data), unemployment is also at really high levels (at around 25%), and the economy has not grown very much. The groups favored are those connected to mineral and energy export-oriented corporations, which has been enough to keep the old white elites and a few in the new black elites well enough while the vast majority not only is left out and with very low living standards (with a ranking in UNDP's Human Development Index of 121 out of slightly less than 190 countries, and life expectancy of 53.4 years), but also suffering from one of the worse HIV/AIDS epidemics in the world.

PS: Similar arguments were put forward by my colleague Geoff Schneider back in 2003 here (subscription required).


Popular posts from this blog

A few brief comments on Brexit and the postmortem of the European Union

Another end of the world is possible
There will be a lot of postmortems for the European Union (EU) after Brexit. Many will suggest that this was a victory against the neoliberal policies of the European Union. See, for example, the first three paragraphs of Paul Mason's column here. And it is true, large contingents of working class people, that have suffered with 'free-market' economics, voted for leaving the union. The union, rightly or wrongly, has been seen as undemocratic and responsible for the economics woes of Europe.

The problem is that while it is true that the EU leaders have been part of the problem and have pursued the neoliberal policies within the framework of the union, sometimes with treaties like the Fiscal Compact, it is far from clear that Brexit and the possible demise of the union, if the fever spreads to France, Germany and other countries with their populations demanding their own referenda, will lead to the abandonment of neoliberal policies. Aust…

A brief note on Venezuela and the turn to the right in Latin America

So besides the coup in Brazil (which was all but confirmed by the last revelations, if you had any doubts), and the electoral victory of Macri in Argentina, the crisis in Venezuela is reaching a critical level, and it would not be surprising if the Maduro administration is recalled, even though right now the referendum is not scheduled yet.

The economy in Venezuela has collapsed (GDP has fallen by about 14% or so in the last two years), inflation has accelerated (to three digit levels; 450% or so according to the IMF), there are shortages of essential goods, recurrent energy blackouts, and all of these aggravated by persistent violence. Contrary to what the press suggests, these events are not new or specific to left of center governments. Similar events occurred in the late 1980s, in the infamous Caracazo, when the fall in oil prices caused an external crisis, inflation, and food shortages, which eventually, after the announcement of a neoliberal economic package that included the i…

What is the 'Classical Dichotomy'?